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BHP Group Ltd BHP

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Stock XLON Rating as of
GBX 2,348.00 +8.00 (0.34%)
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Company Report

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BHP: Key Iron Ore Sales Solid, While Copper Also on Track

Jon Mills

We retain our AUD 40.50 fair value estimate for no-moat BHP with fiscal 2024 third-quarter sales broadly in line with our expectations. Fiscal 2024 production guidance remains within previously announced ranges, except for metallurgical coal, which is again reduced, meaning unit cash costs are likely to be higher than previously guided. However, the changes are immaterial to near-term earnings, and we forecast fiscal 2024 EBITDA of about USD 29.5 billion. Our longer-term forecasts also remain largely intact.

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Price vs Fair Value

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BHP is trading at a 11% premium.
Price
GBX 2,340.00
Fair Value
GBX 1,851.00
Uncertainty
Medium
1-Star Price
GBX 6,715.00
5-Star Price
GBX 3,412.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

BHP is a beneficiary of continued global economic growth and demand for the commodities it produces.

Bears

BHP has shown improved capital allocation since its mis-steps during the China boom, but continuing high commodity prices could encourage it to once again aggressively expand output.

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Trading Information

Previous Close Price
GBX 2,340.00
Day Range
GBX 2,342.00–2,372.50
52-Week Range
GBX 2,157.00–2,707.50
Bid/Ask
GBX 2,200.00 / GBX 2,438.00
Market Cap
GBX 11.89 Tril
Volume/Avg
1.1 Mil / 1.9 Mil

Key Statistics

Price/Earnings (Normalized)
10.93
Price/Sales
2.67
Dividend Yield (Trailing)
5.13%
Dividend Yield (Forward)
5.13%
Total Yield
5.13%

Company Profile

BHP is a global diversified miner mainly supplying iron ore and copper. The merger of BHP Limited and Billiton PLC created the present-day BHP Group. The dual-listed structure from the 2001 BHP and Billiton merger was collapsed in 2022. Major assets include Pilbara iron ore and Escondida copper. Onshore U.S. oil and gas assets were sold in 2018 and the remaining Petroleum assets were spun off and merged with Woodside in 2022, with BHP vesting the Woodside shares it received to BHP shareholders. BHP is growing its nickel business to supply more battery-grade nickel and is also entering the potash market through the development of its Jansen mine in Canada. It also purchased copper miner Oz Minerals in fiscal 2023.
Sector
Basic Materials
Industry
Other Industrial Metals & Mining
Stock Style Box
Large Value
Total Number of Employees
42,319
Website
https://www.bhp.com

Competitors

Valuation

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Metric
BHP
RIO
VALE
Price/Earnings (Normalized)
 10.9311.956.39
Price/Book Value
 3.652.631.33
Price/Sales
 2.672.601.27
Price/Cash Flow
 6.918.493.78
Price/Earnings
BHP
RIO
VALE

Financial Strength

Metric
BHP
RIO
VALE
Quick Ratio
 1.081.040.60
Current Ratio
 1.571.691.28
Interest Coverage
 7.598.049.33
Quick Ratio
BHP
RIO
VALE

Profitability

Metric
BHP
RIO
VALE
Return on Assets (Normalized)
 13.90%11.84%10.92%
Return on Equity (Normalized)
 31.67%22.48%25.89%
Return on Invested Capital (Normalized)
 21.70%19.38%19.40%
Return on Assets
BHP
RIO
VALE
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